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Keep your eye on the price

How far can you push haggling with owners and estate agents and avoid causing offence?

24 February 2011

WHEN negotiating a property price, do not list its weak points just to justify a low offer: the seller will take it personally.

However, by using the right tactics you can knock off up to 30 per cent off the price of a house and negotiate with the estate agents over their fees, says the owner of TotallyRiviera property finders, Dennis Broadfield.

"Don't suggest a discount because the bathroom is out-dated," he said. "The owner will say the bathroom is perfect, and become upset and not want to sell to you. Be circumspect, just say, 'I think it may be too expensive, especially in the market today'."

Mr Broadfield, whose firm helps English-speakers find and buy homes, said location was critical to your bargaining margins.

Popular areas such as the Riviera offer limited room for manoeuvre, he said. "My clients often offer about five per cent under the asking price and may get 2.5, but in some regions I have heard of discounts of up to 30 per cent."

Mr Broadfield said that, on average, Riviera agents charge six per cent commission. "I have not seen it lower than five here, and I've heard of properties selling with up to 10 per cent in Normandy where a lot of people use single agents. Here properties are listed with several and a guy asking 10 per cent will not get the sale."

Three per cent is the lowest he has seen in France, he said.

Estate agent Charles Gillooley, of Immobilier Causses et Vézère, Dordogne, said holiday homes in rural areas were often overvalued by 20-25 per cent. "The agent will advise on price, but is usually ignored. Agents should refuse to
take on the property if the seller's price is unrealistic, but few do," he said.

In such a case, it may be reasonable to propose a substantial discount. While this is difficult with holiday homes in popular areas like the Basque Country, Paris or the Côte d'Azur, Mr Gillooley, Aquitaine vice-president of estate
agent's group Fnaim, said it is possible to find realistically priced properties in those areas, especially if the buyer wants a quick sale.

"Even then, I would expect a minimum of negotiation because nobody will buy at the asking price these days. As a buyer, you must find out what is reasonable. Once you have visited a few properties, you will see which are worth their
money. Then, when you find one that interests you, you will know if you are being ripped off."

"If it is realistically priced do not make a low offer because the French, and a lot of Britons, will see it as insulting and refuse to deal with you," he added.

Sellers in rural areas are often willing to wait two years to sell. "None of this applies in the residential market in a city such as Bordeaux, where sellers expect to sell in three to six months. Values there are probably five to 10 per cent of the asking price, but it is easier to check because there will be hundreds of similar ones."

Mr Gillooley said commissions must be displayed in agents' windows, but whether the buyer or seller pays will vary from region to region. If the price displayed includes it, you will see a statement like frais d'agence inclus (or FAI).

"You may say that five per cent on €800,000 is €40,000, but the fee is inclusive of VAT, so it is actually €32,000. That still sounds a lot, but the agent is running an agency, which means doing specific advertising and training specialised sales staff, not just sticking a card in a window or a small ad on the internet," said Mr Gillooley.

Compared to the increasingly popular option of person-to-person sales, he said the buyer benefits from choice and professionalism.

"It is fairly common for private individuals to over-estimate the size of their house, whereas agents guarantee accurate details. The agent can advise on financing, considerations when buying a second home, inheritance and more.

"If you feel your situation is very simple, however, and you speak very good French and have plenty of time to look around, there's no reason not to follow up leads privately," he said.

Agents do not offer any extra guarantees of the properties' condition, but are insured for their professional advice and procedures.

Certain notaires sell property and operate with regulated commissions that cannot exceed six per cent, including VAT, for properties under €50,000, or three per cent above that. This is quite common in cities and in areas such as
Brittany, where it is traditional. However a notaire will rarely be as flexible as an agent, Mr Gillooley said. They probably will not do evening or weekend visits and are less likely to speak English.

"They tend to stick to simple things, like selling a flat round the corner, for a client that they do other work for as well."

A good way to estimate fair prices is the notaires' databases of recent sales (the prices are three-months old) at www.immoprix.com (provinces) or www.paris.notaires.fr/statimmo/statimmo.php (Paris). You can pay a notaire for a more detailed analysis.

"I negotiated 50% off €1.2m property"

ALLISON Feeley bought a property in the Tarn et Garonne in early 2010 that was originally priced at €1.2m. The owners dropped to €840,000 and she had negotiated a further reduction of 11 per cent before a notaire's search showed a LGV
was to be built nearby. The final agreed price was €690,000, with the agent's commission of €20,000 included. On moving in during April 2010, she learnt that the LGV was being moved further north and was unlikely to be a problem.

MAGGIE Lowey bought a detached house in the Figeac area, in the Lot, in 2002, asked for 19 per cent off, and got 17. This was reasonable because substantial renovation was required, she said.

JACQUI Miller offered 16 per cent under the asking price for a converted mill with 15 acres near Carhaix, Brittany, in 2006. The sellers made a counter-offer and they split the difference, with a final discount of nine per cent.

EVELYN and John O'Connor, Vendée, offered 23 per cent off their 20-year-old house with three acres, plus asked for notaires' fees to be included; 20 per cent was accepted. They said the house needed costly work to make it acceptable.

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